KrisEnergy

KrisEnergy: Key takeaways from a recent HSBC roadshow are: i) Compared with its predecessor Pearl, Kris has a much more mature and diversified portfolio, with a higher hit rate. ii) Any of the big hits in Vietnam would change the company’s entire outlook. iii) The company expects to win the bids and expand into Malaysia and Bangladesh before next month. iv) Breakeven price is US$42-45/bbl, therefore there is enough room for oil price fluctuations. Kris has 16 blocks currently (two in Vietnam, five in Thailand, seven in Indonesia, one in Cambodia and one in Bangladesh) and is operational on eight of them. Since being incorporated in 2009, 27 wells were drilled and 18 discoveries made with seven now under development. The success rate is 67% versus 50% at Pearl. Keppel is a strategic investor in Kris and holds a 35% interest post-IPO. HSBC has a Underweight rating with TP of $1.10.